2015: Poland Expects First Tanker at Sole LNG Port

By MarEx 2014-07-24 10:21:00

The first tanker carrying Qatari liquefied natural gas (LNG) should arrive at Poland's first LNG terminal, being built to cut reliance on Russian gas imports, around the end of the first quarter next year, Poland's treasury minister said on Thursday.

"The construction is to be finished at the turn of 2014 and 2015," Wlodzimierz Karpinski told public radio. "2015 is the year when the terminal is to be ready for use. The first tanker is expected at the turn of (the) first and second quarters."

Poland is building the terminal at the Baltic port of Swinoujscie at a cost of around 3 billion zlotys ($977.2 million). It will be able to accept 5 billion cubic meters of gas per year, with plans to expand it to 7.5 billion.

At full power, the terminal could handle around half of Poland's current annual gas usage. The facility, together with the country's drive to tap its shale gas deposits, is part of Poland's plans to wean itself off deliveries from Russia.

Poland still relies on imports for roughly two thirds of its annual gas usage of around 16 billion cubic meters, mostly from its former Soviet master.

Since 2009, when Russia supplied 91 percent of Poland's gas, Poland has doubled the capacity of a pipeline link with Germany and built a new link to the Czech Republic.

But curbing energy dependence on Russia comes at a price. Shale gas exploration is proving burdensome for local energy companies, while Qatari gas to be shipped to Swinoujscie will be more expensive than Russian deliveries.

Under an agreement signed in 2009, Poland's state-controlled gas distributor PGNiG will buy 1 million tonnes of LNG annually from Qatargas, the world's biggest LNG exporter, for 20 years at a price linked to crude oil.

The "take-or-pay contract" requires PGNiG to begin paying for LNG whether the terminal is ready or not. Delays in building the facility have led Poland to negotiate with Qatargas over ways to avoid having to make payments without receiving any gas. ($1 = 3.0700 Polish Zlotys)

Copyright Reuters 2014.